In the Goodyear Tire & Rubber Company‘s fourth-quarter statement, the company reported its fourth-quarter 2019 net loss was $392 million ($1.68 per share) compared to net income of $110 million ($0.47 per share) a year ago.
Goodyear says the decrease was driven by discrete tax adjustments of $380 million during the fourth quarter of 2019, including a non-cash charge of $334 million related to an acceleration of royalty income in the U.S. from the sale of the next twelve years of European royalty payments to Luxembourg business and rationalization charges of $77 million.
Tire unit volumes totaled 39.6 million, down 2% from 2018. Original equipment unit volume decreased 10%, driven by lower global vehicle production. Replacement tire shipments increased slightly, according to Goodyear’s financial reports.
“In the U.S., market conditions remained largely stable and our consumer and commercial replacement businesses delivered strong performances this year, as they benefited from the strength of our brand, new product introductions, and the steps we have taken to align our distribution,” said Richard J. Kramer, chairman, chief executive officer and president. “We also delivered solid consumer replacement growth in both China and Brazil during the second half of the year,” he added.
“We continue to face a challenging global environment, including recessionary demand trends in many international markets. To address these challenges, we remain focused on further improving our cost structure and working capital management, while continuing to build our capabilities to enable mobility, today and in the future,” said Kramer.
Goodyear’s fourth quarter 2019 sales were $3.7 billion, down 4% from a year ago, which the company says is driven primarily by lower industry volume and unfavorable foreign currency translation, partially offset by improved price/mix.
Fourth quarter 2019 adjusted net income was $45 million (19 cents per share), compared to $120 million (51 cents per share) in 2018.
The company reported segment operating income of $242 million in the fourth quarter of 2019, down from $307 million a year ago. The decline primarily reflects a decrease in favorable indirect tax settlements in Brazil, lower factory utilization and lower volume, Goodyear says.
Goodyear’s 2019 net sales were $14.7 billion, a 5% decrease from the prior year due to unfavorable foreign currency translation, lower volume and reduced third-party chemical sales, Goodyear says. These factors were partially offset by improved price/mix.
Tire unit volumes totaled 155.3 million, down 2% from 2018. Original equipment volume decreased 8%, primarily due to lower global vehicle production. Replacement tire shipments were essentially unchanged.
Goodyear’s 2019 net loss was $311 million ($1.33 per share) compared to net income of $693 million ($2.89 per share) in the prior year. The 2019 period included several significant items, most notably discrete tax adjustments of $386 million and rationalization charges of $205 million, primarily related to the previously announced plan to modernize two tire manufacturing facilities in Germany and a plan to curtail production of tires for declining, less profitable segments of the tire market at its Gadsden, Alabama, manufacturing facility, the company says. Goodyear’s 2018 net income included a net gain of $272 million resulting from the TireHub transaction, net of transaction costs. Full-year 2019 adjusted net income was $253 million ($1.08 per share) compared to $555 million ($2.32 per share) in the prior year.
The company reported segment operating income of $945 million in 2019, down from $1,274 million a year ago. The decrease primarily reflects higher raw material costs, lower volume, a decrease in favorable indirect tax settlements in Brazil and unfavorable foreign currency translation, which were partially offset by improved price/mix, the company says.